The year 2020 is certainly one for the record books. Firstly, from the entire Serengeti team, we hope that you and your family have managed to keep safe during this pandemic. I’m pleased to report that your company, its employees and contractors have been able to work safely whilst advancing our projects and setting 2020 up to be a significant year for the company and you the shareholders.
As you are aware from my last letter, our focus at the Kwanika project this year returned to exploration. We felt strongly that we could add value to the project and to you the shareholders, by testing targets that had the potential to increase the known resource as well as testing earlier stage targets that could add exploration upside to the Kwanika copper gold project.
The drill program at Kwanika met these objectives by: demonstrating that the Central Zone resource remains open for expansion to the south and that a bounding fault that limits the resource to the west, lies further west than previously modeled, hence potentially bringing already identified resource into an eventual mine plan. The South Zone was also tested for near surface better grade material and a deep target to the north of the Central Zone continues to offer the possibility of additional resource discoveries on the property. Elsewhere on the property, geophysics at the Rottacker target, 22 km to the south has identified an IP chargeability anomaly coincident with a previously identified geological and geochemical target and now represents a target for future drilling.
We completed 4,350 m in nine holes in the 2020 drilling campaign at Kwanika and we eagerly await assay results from the laboratory. I will caution investors that results will be slower to come than in past years because laboratories have had to implement new Covid-19 protocols to stay safe and continue operating which they have done effectively. These new protocols however, have lengthened turn-around time from the labs and this is affecting our entire industry.
One of our most exciting and potential game changing events for Serengeti this year was the advancement of our East Niv project. This summer’s field work identified a three and half sq.km., multiparameter, porphyry copper-gold target that we believe demonstrates district scale potential. The property is located in an under-explored region of the eastern Stikine Terrane, approximately 15km west of the Sustut Copper deposit and 40km south-southwest of the Kemess mine complex. Serengeti initially staked East Niv in 2018 and has subsequently expanded the property to more than 20,000 hectares. The Company has been awarded a 5-year exploration drilling permit and plans a significant drill program at East Niv in 2021.
Moving forward, after receiving and analyzing all of the 2020 program results, planning for next year will begin with the objective of materially advancing the Kwanika project towards completion of a Prefeasibility Study and drilling a discovery hole at East Niv. Success at either, should increase shareholder value.
You can follow our progress on our website at www.serengetiresources.com or subscribe to our feeds on Twitter at @SIResources or LinkedIn for up to date news. As always, we welcome your calls and emails.
On behalf of the entire Serengeti team, I’d like to thank you for your continuing interest and support. Yours truly,
David W. Moore
President & CEO
One month into 2020, I’m pleased to report that your company is great shape for the coming year.
The end of 2019 was good to Serengeti. We were able to raise significant capital, closing a $1.6-million flow through financing in December and arranging a follow on $700k hard dollar unit financing which closed a couple of weeks ago. The icing on the financial cake for us was the early repayment of the Mineral Exploration Tax Credit (METC) refund of $1.1-million from the BC government. We weren’t expecting the refund until late 2020. Kwanika Copper Corp. is contractually obligated to pay the METC monies to Serengeti, which it has now done.
Consequently, we’ve been able to clean up our balance sheet, and pay off all of our accrued liabilities including the $700k loan that was backstopped by the METC refund. As of mid-January, we have more than $2.6-million in cash to fund our 2020 exploration plans.
So what are we planning?
Firstly, our focus at the Kwanika project returns to exploration. We see exciting exploration potential close to Kwanika and further afield on the large land package. We’ve identified a potentially game-changing drill target close to the Kwanika porphyry that our 2016 drilling appears to have just missed. We’ll also be testing some greenfields targets at Kwanika that we’ve known about for a few years but haven’t been able to test while the focus was so firmly on the PFS work. On the engineering side, following up on some encouraging early stage results from last year’s work, we’re looking at a number of possibilities to optimize the study including mineral/material sorting.
We will be sole funding this year’s program at Kwanika, hence our ownership in KCC will increase to approximately 67%. In the broader context of improving fundamentals for the copper market, we think this is a well-timed opportunity for Serengeti.
Secondly, on the regional exploration front, the 2019 work programs successfully advanced a number of our properties to the drill-ready stage several of which we plan to drill test in 2020. My team and I are particularly enthusiastic about the targets outlined on the East Niv property located southwest of the Kemess Mine. Our work there identified a new porphyry prospect with substantial Cu and Au grades.
Intriguingly, one early stage property that we optioned last year - the Nova target on the Top Cat property - returned elevated copper and palladium values, up to 1.38g/t Pd locally. Given that the spot price of Palladium is just under US$2,300/oz, we’ll be taking a long hard look at this target and I’m looking forward to advancing TopCat to the drill stage.
These developments couldn’t come at a better time for Serengeti. Investor interest in BC-focused explorers remains high, and the mood at the recent Vancouver Resource Investor Conference and the Cordilleran RoundUp (where I had the opportunity to talk to a number of our shareholders) was very positive. We believe 2020 is shaping up to be a much stronger resource market than we’ve seen for years, particularly on the copper-gold side.
In early March, we’ll be exhibiting at the PDAC conference in Toronto. This is the mining and exploration event of the year, and we’ve been able to secure a spot in the Core Shack to highlight Serengeti’s projects. The Core Shack is a very popular feature of PDAC and one of the best showcases for up and coming projects. If you’re planning on attending, please stop by.
You can follow our progress on our website at www.serengetiresources.com or subscribe to our feeds on Twitter at @SIResources, Facebook or LinkedIn for up to date news. As always, we welcome your calls and emails.
On behalf of the entire Serengeti team, I’d like to thank you for your continuing interest and support.
David W. Moore
President & CEO